All those who think Alan may run off to FWA and attempt to cry poor in order to get favours may wish to read the following from the Australian on the 6th of March 2014.
Qantas chief Alan Joyce says airline now 'extremely healthy'
QANTAS chief executive Alan Joyce has started to reverse his rhetoric dramatically on the future of the airline, playing down concerns about the national carrier's viability following the government's rejection of its plea for a debt guarantee.
Now Mr Joyce says the airline is "extremely healthy", just four months after warning of its possible demise.
Staring down calls from investors for management changes at the airline, Mr Joyce told a business lunch in Sydney his board was "supportive" and vowed to continue the capacity war with rival Virgin Australia.
Mr Joyce said a debt default by Qantas would "never occur", even in the event the Qantas Sale Act was not changed or the federal government did not guarantee any of its debt.
"The operating cashflows . . . are extremely strong in this business. We believe we can get the cashflow positive with the $2 billion cost reductions, and we can get back to profitability and to be paying down any debt," Mr Joyce told an Australia-Israel Chamber of Commerce lunch in Sydney.
"So that (a debt default) will never happen. We are very comfortable that Qantas is a very healthy airline."
The comments -- in stark contrast to last November, when Mr Joyce warned that Qantas had no future without legislative changes to the Qantas Sale Act -- come as Mr Joyce attempts to restore confidence in the airline after months of escalating tensions over its strategy, job losses of 5000 announced last week and claims that Virgin is using a "sham" ownership structure to allow sovereign-backed competitors to wreck profits on its domestic business.
Qantas has been seeking a debt guarantee from the government to allow it to refinance at cheaper rates than it could obtain under its junk credit rating.
Mr Joyce said the loss of an investment grade credit rating in November would cost the airline "tens of millions", but that the impact would "take a while to work through" as the airline refinanced or raised new money.
"Most of our commercial colleagues in this space, all of the American airlines, all of the European airlines and a lot of the airlines around the globe are sub-investment grade," Mr Joyce said.
The public statements come as the government has ruled out any moves to guarantee the airline's debt, and as its push to "unshackle" Qantas from foreign ownership restrictions face rejection in the Senate.
In November, when Mr Joyce was lobbying heavily for government assistance or intervention, the chief executive warned: "If this continues, there will not be a Qantas in the future."
The national carrier also appeared to backflip on its position regarding the impact of the federal carbon tax on its bottom line.
In a statement issued yesterday afternoon, Qantas described the tax as "among the most significant challenges we face". Last week a Qantas spokesman said the airline's current issues were "not related to carbon pricing".
That contrasted with Virgin chief executive John Borghetti, who last week said removing the carbon tax was the best thing the government could do for the airline industry.
Mr Borghetti's opposition to a debt guarantee for Qantas was subsequently taken up by Tony Abbott, who said the government would have to make such a guarantee available to all players in the industry.
The Qantas about-face followed a heated parliament session on Monday, during which the federal government questioned the sincerity of Qantas's pleas for help when a $106 million carbon tax bill last financial year was not a major concern.
Analysts at JPMorgan said the removal of the foreign ownership restrictions did not guarantee that Qantas would be able to find a white knight and would not address all its cost problems.
The analysts said Qantas still had a quarter more employees than rivals such as Singapore Airlines and Cathay Pacific, relative to the number of kilometres flown per passenger.
And while Qantas and Virgin both had average employee costs of $115,000, two of Virgin's four major shareholders, Air New Zealand and Singapore Airlines, paid an average $83,000 and $84,000 respectively.
Abolishing Part 3 of the Qantas Sale Act would allow Qantas to relocate some of its costly operations offshore and address its uncompetitive cost structure, analysts Carolyn Holmes and Olivia Bible said in a note to clients.
"While the proposed changes to ownership caps would level the playing field with Virgin, it does not necessarily guarantee Qantas finds a white knight with deep-enough pockets to help support its efforts to defend its market position," they said.
Mr Joyce would not be drawn on how or whether Qantas would be split if the Qantas Sale Act was repealed. However, he said Qantas's model as a "collection of businesses" had been "fantastic" to the company.
"Qantas is an integrated business," Mr Joyce said.
"We are very comfortable that Qantas is a very healthy airline". You have it from the horses mouth. Misleading the market is a very serious offence in this country. If the statement is not true, why would he have said it?